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What is the limitation period for a claim brought by a liquidator as a consequence of section 127 of the Insolvency Act 1986?

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Published on LexisPSL on 05/12/2017

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • What is the limitation period for a claim brought by a liquidator as a consequence of section 127 of the Insolvency Act 1986?

What is the limitation period for a claim brought by a liquidator as a consequence of section 127 of the Insolvency Act 1986?

Where a company disposes of any of its property at the time between the presentation of a winding-up petition against it and a winding-up order being made on that petition, that disposition is void under section 127 of the Insolvency Act 1986 (IA 1986), unless otherwise validated by the court (whether before or after the disposition occurs). IA 1986, s 127 applies only in respect of a company that has been wound up by the court.

For further reading on IA 1986, s 127 and its effect, see Practice Note: Restrictions on dispositions of property and void transactions once a winding-up or bankruptcy petition has been presented.

Although IA 1986, s 127 prescribes the status of a disposition made by a company of its property at the relevant time, it does not in itself provide the liquidator with a remedy. Instead, as identified in: Recovery of property where disposition void: Bailey & Groves: Corporate Insolvency—Law & Practice [22.22], the liquidator will need to make a

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